Boston Scientific's Lotus Edge TAVR system received CE Mark in September 2016 but does not yet have FDA approval.
Boston Scientific has signed a deal to acquire Vancouver-based Neovasc Inc.'s tissue processing technology and facility for approximately $67.9 million. The purchase signals Boston Scientific's continued investment in its structural heart business, particularly its Lotus transcatheter aortic valve replacement (TAVR) program.
The deal, expected to close by the end of 2016, also includes a 15% equity investment in Neovasc for approximately $7.1 million.
Ed Mackey, executive vice president of operations at Boston Scientific, said in a company press release, "The vertically integrated operational capabilities resulting from this acquisition will strengthen our structural heart pipeline and immediately benefit our Lotus valve platform as we work to increase our market share in Europe and prepare for launch in the U.S. expected in late 2017."
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Stifel analyst Rick Wise described the acquisition in a December 2 research note, writing, "with the tissue facility transaction, we believe BSX is very shrewdly consolidating and securing its current and future Lotus TAVR valve supply-chain with an FDA approved facility that is up and running."
Neovasc will still have access to its sold facilities and will be able to continue providing its other customers with tissue and valve assembly activities using a license granted for the acquired assets, according to the company's release. The deal also doesn't impact Neovasc's work on its own tissue-related programs.
Neovasc may be best known for its work to develop the Tiara transcatheter mitral valve replacement system. In late November, the company announced that it had received regulatory and ethics committee approval to start a 115-patient non-randomized, prospective study in Italy. The first patient enrollment is expected in early 2017 and data from that study will be used to seek CE Mark approval for Tiara.
Wise wrote, "We view the $7M Neovasc equity investment as a very inexpensive option on NVCN's Tiara mitral valve replacement program . . . "
Boston Scientific's latest generation Lotus Edge TAVR received CE Mark in September 2016 for use in high-risk patients with aortic stenosis. Soon after, commercial implants of the device were voluntarily paused to address an issue with the locking mechanism for one pin in the valve's commissure--observed in 7 of about 200 patients (4%) implanted commercially.
Company management said at the time that a valve redesign was not expected to be necessary and commercial timelines would be unchanged. With the Neovasc announcement, management reiterated anticipated FDA approval and U.S. launch in late 2017.
Wise pointed to this as a significant detail, writing, "Most important is that US approval timelines are on track and that the company's working assumption continues to be that a device re-design will not be required."
[Image courtesy of BOSTON SCIENTIFIC]